‘Virtual’ competitors to be allowed to offer internet services in Ethiopia

24 May 2018 | Alan Burkitt-Gray

Ethiopia has started a partial liberalisation of its telecoms sector, but competition will be restricted to local companies and foreign firms will still be banned.

State-owned monopoly Ethio Telecom says it has signed deals with eight companies to be virtual internet service providers (VISPs). All VISPs will use Ethio Telecom’s infrastructure.

Abdurahim Ahmed, head of communications at the monopoly, told the Reuters news agency: “Our objective of signing VISP agreements is to increase subscriptions. There may be price reductions. There will be competition among themselves — that is the core idea.” He said they would provide “downstream services” only.

Ethio Telecom announced a few days ago that it has earned more than $1 billion in revenue in the first three quarters of its current financial year. More than 75% comes from mobile services, it added.

But internet penetration is low. Ethiopia has a population of 100 million, with only 16 million interest users.

The eight VISP partners will offer different packages, Ahmed told media in Addis Ababa, the capital. The only one identified so far is the G2G group of IT companies, which offers internet services under its G2G Clarity brand.

G2G has had a value-added service licence from the government for two years, but now also has a VISP agreement with Ethio Telecom.

Ahmed explicitly ruled out foreign companies from VISP deals with Ethio Telecom – and the Ethiopian government has held out against privatisation or wider competition, saying it wants to use Ethio Telecom’s revenue to fund wider infrastructure projects.